Flawed Cato study claims that “welfare” pays better than work
A wildly misleading report .. http://www.cato.org/publications/white-paper/work-versus-welfare-trade .. released recently by the conservative Cato Institute says that it pays to be jobless and poor. In an attempt to bolster a laughably farfetched theory sometimes referred to as “the hidden prosperity of the poor,” the authors conclude that the “welfare system provides such a high level of benefits that it acts as a disincentive for work.”
Not surprisingly, however, neither the theory nor the findings in the report stand up to serious scrutiny. Indeed, as a result of several obvious and truck-sized flaws in the analysis, there is every reason for the report to be quickly ignored and/or discarded by both policymakers and anyone else who cares about basing public policy on facts and rigorous study.
The first and most blatant error in the report is the authors’ enormous exaggeration of the public benefits that most people living in poverty actually receive. To bolster their case, the authors assume that the “typical welfare family”—which they define as a single mother with two children—receives each of the following services: Temporary Assistance for Needy Families (TANF), SNAP (formerly known as Food Stamps), WIC (a nutrition program for pregnant and postpartum women and young children), Medicaid, housing assistance, utilities assistance, and emergency food assistance. But this is simply not the case in North Carolina or anywhere else in the United States. The vast majority of poor people do not receive all the services they are eligible for, in part because there are not enough funds to allow that.
For example, the share of poor families in North Carolina that receive TANF benefits is actually very, very small: for every one hundred families in poverty, there are just nine families receiving TANF benefits .. http://www.cbpp.org/cms/index.cfm?fa=view&id=3915 . Nationally, that figure jumps to only 27. Moreover, the majority who receive assistance do so only for short periods of time – in part-due to federal time limits that have been in place for more than 15 years. Additionally, fewer than one in five SNAP households with children receive TANF and fewer than one in ten of WIC participants receive TANF nationally—meaning there is little overlap among many of these assistance programs.
A second egregious error is the authors’ gross underestimate of the assistance that families who work but earn low-incomes receive. The authors incorrectly assume that safety net benefits are available only to nonworking families. But again, this is completely untrue. All of the benefits included in the analysis are, in fact available to working families. So it is no surprise that nearly four in ten SNAP recipients in North Carolina are in working families. In fact, TANF requires work-eligible individuals to participate in work requirements in order to receive benefits at all.
The authors’ analysis also ignores significant changes to the nation’s safety over the last 30 years. As noted in a recent response to the Cato claims authored by experts at the widely-respected Center on Budget and Policy Priorities, assistance programs are actually designed to offer a lot more support to families who work but earn low wages and far less support to the poorest jobless families with children.
Of course, the dark irony in all of this is that by propagating myths about “welfare,” flawed studies like the Cato report serve to undermine public support for important programs that are primarily designed to encourage work by enabling hard working, low-income families to survive.
When so much is at stake for so many adults and children, it is important that policymakers are informed with high-quality analysis and well-researched policy recommendations. Sadly, the Cato study just doesn’t live up to these standards. Let’s hope the public and policymakers alike avoid falling prey to its many distortions.
The new line, deployed against Pope Francis’ dismay at the materialism and ideological fixity of global market capitalism, is that the Pope was only referring to Argentina. Global capitalism in Argentina, according to the theocons and neocons, is so different than in the United States that Pope Francis’s critique is simply a regional one. In Argentina, he’s only referring to crony capitalism, entwined with government, combined with an entrenched lack of social mobility. If the Pope were to understand American capitalism better, he’d realize it was a truly free market, empowering social mobility, creating wealth and disseminating it on a massive scale. On CNN last week, that was essentially Newt Gingrich’s argument against the Pope’s Apostolic Exhortation (which I explore in considerable detail here .. http://dish.andrewsullivan.com/deepdish/longform/untier-of-knots/ ).
A mega-rich donor to the American Catholic church is so offended by the Pope’s words on the importance of poverty that he is allegedly hesitant to pay for a large amount of the restoration of Saint Patrick’s Cathedral. Cardinal Dolan, the reactionary now left stranded by the new papacy, has struggled to rebut the implications of the Pope’s somewhat unequivocal words. Arthur Brooks, a Catholic running the American Enterprise Institute that favors torture, unfettered global capitalism, and pre-emptive war, makes the case .. http://www.cnbc.com/id/101302230 .. as succinctly as he can:
----- Arthur Brooks … said he agrees that the pope’s beliefs are likely informed by his Argentine heritage. “In places like Argentina, what they call free enterprise is a combination of socialism and crony capitalism,” he said. Brooks, also a practicing Catholic who has read the pope’s exhortation in its original Spanish, said that “taken as a whole, the exhortation is good and right and beautiful. But it’s limited in its understanding of economics from the American context.” He noted that Francis “is not an economist and not an American.” -----
So America is so unlike Argentina that the Pope should not be taken seriously. The trouble with this assessment is that the Pope clearly was not restricting himself to Argentina in his Exhortation. His remit was much wider. Here’s a critical passage .. http://www.vatican.va/holy_father/francesco/apost_exhortations/documents/papa-francesco_esortazione-ap_20131124_evangelii-gaudium_en.html .. and it’s quite clear that the Pope is referring not to a single country but to the ideology of a global system, rooted in the economy of the United States and its unipolar power since the end of the Cold War:
The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf. Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings; man is reduced to one of his needs alone: consumption. While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few.
The question is: is this only true of Argentina and not of the US, as Arthur Brooks and Newt Gingrich claim? Let’s take a look at each countries’ one percent, and then the top 0.1 percent, and see how much of a country’s wealth they each represent. Here’s a graph from 2005 .. http://www.verisi.com/resources/us-income-inequality.htm .. that shows where various countries fit on that scale:
Funny, isn’t it, how utterly similar the US and Argentina are in terms of inequality? Since that date, the US’s top one percent have moved from earning around 17 percent to more than 20 percent.
So in terms of both income inequality and social mobility, the US and Argentina are basically the same country. So why does the Pope’s arguments apply only to Argentina and not to the US? I’m not an economist, so maybe there’s another dimension here that I’ve overlooked. As always, I’d be more than happy to post any correctives or clarifications to this basic reality. But right now, it seems to me that the Catholic right is simply wrong. Their American exceptionalism has morphed from a thoroughly admirable national pride at America’s achievements to a fixed and rigid idolization of a single country along with an idolization of wealth. Both, to put it mildly, are heresies. And perhaps the biggest impact of the new Pope on American politics will be more forthrightly denying the denialist, ideological right any Catholic crutch to peddle their snake-oil with.
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